Accounts and coverage

UNDERSTANDING ASSESSED PREMIUMS

WorkSafeNB uses a combination of components to determine an
employers' premium for workers' compensation insurance coverage.
The intent of the system is not to balance each insured employer's
premium payment exactly to the insured employer's costs, but rather
to group and assess employers by similar industry and accident
risk.

How is my premium calculated?
WorkSafeNB premiums are calculated by determining an overall
assessment rate, which is then charged annually to the employer per
$100 of assessed earnings. Several factors influence the amount of
each employer's overall assessment rate, as outlined below:

Industry classification
Employers are classified by type of industry (not by the
occupation of each worker) and the classification is intended to
reflect the total activities and output of the industry. New
Brunswick's more than 14,000 employers are each assigned one of 789
industrial classification codes, as defined by the North American
Industry Classification System (NAICS).

Industry grouping
Employers are then sorted into one of 75 industry groups,
according to their five-year accident costs, type of risk, and
other factors.

Rate grouping
Employers are next assigned a rate group according to their
accident or hazard risk. For each rate group, a rate of assessment,
levied per $100 of payroll, is set each year at the level estimated
to yield sufficient revenue. Several factors influence the setting
of assessment rates, such as: the recent injury and cost experience
in each industry class, the current financial strength of
WorkSafeNB, and other factors such as the prevailing economic
environment and current adjudication policies.

Experience rating
Employers with an average annual premium of $2,000 or more are
automatically assigned an experience rating, which acts as the
final factor in calculating their premium. This rating allows their
assessment rate to vary on the basis of accident experience. For
example, an employer's rate is adjusted downward to a maximum of
40% or upward by as much as 80%, depending on whether that
employer's claim cost experience compares favourably or
unfavourably with the average claim cost of the rate group. This
program is designed to reward employers with few and less severe
accidents or injuries with lower premiums, and provide a financial
incentive to those with higher ratings.

What are assessable earnings?
Once an overall assessment rate is calculated for your business,
it must be applied to each $100 of assessable earnings during the
year in question. The resulting number is the premium you must pay
to WorkSafeNB.

Assessable earnings, generally speaking, are comprised of all
payroll and payroll-related monies, up to an annual limit, for the
year in question. That means an employer is assessed on the gross
earnings of a given worker, up to the yearly maximum, regardless of
the period worked. Click for a complete list of assessable
and non-assessable earnings.

Assessable earnings
include the following:

wages

salaries

commissions

bonuses

vacation pay

overtime pay

sick pay

honorariums

director's fees

distribution of profits reported on a T-4 or T-4A

tips and gratuities included on T-4

call in / call back pay

shift premiums

labour value of contract workers

cash in lieu of a notice

amounts received for profit sharing

municipal counselor allowances reported on a T-4 or T-4A

employer's portion of RRSP contribution if available to the
recipient prior to age 65

any other financial remuneration reported as income by the
employer

Non-Assessable Earnings, which employers are not required
to report to WorkSafeNB, include:

taxable allowances for:

travel

tools

clothing

dry cleaning

use of vehicle

dividends reported on a T-5

retirement allowances

any other taxable benefits which are not monetary

employer's portion of RRSP contribution if locked in until age
65

earnings for proprietors, partners, their spouses and their
children under the age of 16 residing at home

New employers
New employers who qualify for mandatory coverage are required to
register with WorkSafeNB within 15 days of the start of the
business and must provide specific information about their
operations and an estimate of the assessable earnings for the
calendar year.

Growing businesses
Employers who qualify for mandatory coverage as a result of hiring
their third worker are required to register with WorkSafeNB within
15 days of the start of the third worker's employment and must
provide specific information about their operations and an estimate
of the assessable earnings for the calendar year.

Alterations to your WorkSafeNB account
There are a variety of business circumstances that will have an
effect on your WorkSafeNB coverage. If your business experiences
any one of the scenarios outlined below, contact WorkSafeNB
immediately.

Business status change (incorporation, etc.)
If your company changes its structure, it may be considered a "new
employer" for WorkSafeNB purposes, and require a new account.

Going out of business
If your company has ceased operations, your annual WorkSafeNB
premium may be adjusted to reflect coverage for the period leading
up to the date operations ceased.

Purchasing another business
Before purchasing any existing business, you should obtain a
clearance letter from WorkSafeNB. This letter will ensure there are
no outstanding premiums owed by the previous owner.

COVERAGE FOR CONTRACTORS AND
SUBCONTRACTORS

Contractors and subcontractors who are not individually registered
with WorkSafeNB are considered to be your workers for the purposes
of workers' compensation insurance, since the contractors are
regarded as being regular workers.

Contractors from New Brunswick
If your business has awarded a contract to a New Brunswick
contractor, one of the following two situations will apply:

Unregistered contractor
If the contractor you are doing business with is not registered
with WorkSafeNB - because they employ fewer than three workers -
you (the contractor's principal employer) will be assessed for
their coverage, based on the gross amount of the contract. You are
also permitted to deduct/recover from the contractor the portion of
assessment for the labour and materials, hired equipment,
courier/mail services and janitorial contractors. Labour-only
contracts cannot be charged back.

Registered contractor
If the contractor you are doing business with requires mandatory
coverage with WorkSafeNB due to the number of workers they employ,
you will not be assessed for their coverage.

Contractors from outside New Brunswick
When a contractor from another jurisdiction is awarded a contract
for work to be carried out in New Brunswick, this contractor is
required to register with WorkSafeNB if:

the contractor has three or more workers.

the duration of the job exceeds one week.

If neither of the above apply, you will be responsible for their
coverage, as noted above in the "Unregistered Contractor"
section.

Clearance certificates
A clearance certificate is a WorkSafeNB document that states in
writing that a business in question has workers’ compensation
coverage and that the business does not have outstanding premiums
owed to WorkSafeNB. An up-to-date clearance certificate should be
requested before making any arrangement to do business with a
contractor. Without a clearance certificate stating the contractor
does not have any outstanding premiums owed to WorkSafeNB or their
local board or commission, your business is liable for:

(i) any unpaid assessments; and
(ii) any assessment related to work carried out by an unregistered
contractor.

Please contact WorkSafeNB's Assessments inquiry line at 1 800
222-9775 or visit WorkSafeNB’s
Clearance Request System page to determine if your contractor
or subcontractor is in good standing with WorkSafeNB.

Reporting
For assessment purposes, you must submit to WorkSafeNB annually a
complete list of the contractors with whom you have entered into
business relationships.

Resource

Assessable earnings
include the following:

wages

salaries

commissions

bonuses

vacation pay

overtime pay

sick pay

honorariums

director's fees

distribution of profits reported on a T-4 or T-4A

tips and gratuities included on T-4

call in / call back pay

shift premiums

labour value of contract workers

cash in lieu of a notice

amounts received for profit sharing

municipal counselor allowances reported on a T-4 or T-4A

employer's portion of RRSP contribution

if available to the recipient prior to age 65

any other financial remuneration reported as income by the
employer

Non-Assessable Earnings, which employers are not required
to report to WorkSafeNB, include:

taxable allowances for:

travel

tools

clothing

dry cleaning

use of vehicle

dividends reported on a T-5

retirement allowances

any other taxable benefits which are not monetary

employer's portion of RRSP contribution if locked in until age
65

earnings for proprietors, partners, their spouses and their
children under the age of 16 residing at home

amounts in excess of the maximum assessable earnings.

WORKING OUTSIDE NEW BRUNSWICK

Workers' compensation insurance coverage may be extended beyond
New Brunswick in cases where a worker is employed by a New
Brunswick employer and works temporarily outside the
province.

Coverage issues
There are two types of coverage a New Brunswick worker can
receive, when working outside of the province:

Temporary coverage from the receiving
jurisdiction
To obtain temporary coverage outside New Brunswick, the employer
must communicate with the receiving jurisdiction (Commission or
board of destination) to determine whether coverage is mandatory in
that jurisdiction. When coverage in the receiving jurisdiction is
not mandatory, WorkSafeNB can recommend that coverage be
extended.

To qualify for this coverage, the individual's usual place of
employment must be within the province of New Brunswick.

Notification process
In either of the above cases, the employer must provide a written
request – in advance of the workers' departure from New
Brunswick – to WorkSafeNB (or board) in question, containing
the names of the workers requiring coverage, their destination and
corresponding time period.

Immunity issues
It is important to note that an extension of coverage for workers
temporarily outside New Brunswick does not provide either employers
or workers with immunity from litigation outside the province. Only
a registration with the other jurisdiction provides such
immunity.